TOKYO, Sept 5 (Reuters) - Japanese government bonds rose

on Friday, tracking the climb in U.S. Treasury bonds following

bets of a Federal Reserve rate cut in September, but the market

remained cautious about domestic super-long bond yields.

Japan's 30-year JGB yield fell as much as 3.5

basis points (bps) to 3.23%, retreating from a record high of

3.285% scaled earlier this week.

Yields move inversely to prices.

The auction for the 30-year bonds in the previous session

was smooth, despite concerns over weakening demand for the

super-long-dated debts as Japan's political scenario remains

uncertain.

However, the yield for lowest accepted price for the 30-year

bond auction was at record high of 3.277%, indicating demand for

a higher premium for the super-long bonds, strategists said.

On Monday, lawmakers of Japan's ruling party will vote

whether to hold an extraordinary leadership election that could

oust embattled premier Shigeru Ishiba, which will have a

significant impact on the world's fourth largest economy.

"The stronger-than-expected auction did not prompt investors

to buy 30-year bonds actively today, as the yield still hovers

at a record level," said Keisuke Tsuruta, a senior fixed income

strategist at Mitsubishi UFJ Morgan Stanley Securities.

The yields could rise further as foreigners, who were

attracted by the higher premium on longer-dated bonds and

widening spreads between the 10-year bond yields, are active

buyers.

The gap in yields between the 10-year bonds and 30-year

bonds was 166 bps on Friday, a record high level.

Unlike life insurers, who tend to hold super-long bonds for

a longer term, foreigners tend to sell the bonds if there is a

cue.

If there is a sell-off, investors who have a flattening

position may be forced to follow suit, which could send the

yields even higher, said Tsuruta.

The 20-year JGB yield fell 2 bps to 2.64%.

The 10-year JGB yield fell 3 bps to 1.57%,

its lowest since August 18.